Call for proposals under the Challenge program

Applicants are expected to complete the Concept note in accordance with the instructions provided in Annex IV. Concept note form. As stated in the form, the applicant should briefly outline the key budget (cost) categories and estimated funding required for the project.

At the Concept note stage, the project budget is indicative, structured by main cost categories (e.g. personnel, equipment, services), and serves to demonstrate the overall financial needs and rationale of the project. It is not required to provide a detailed per-partner budget breakdown or fully itemized costs at this stage. When preparing the budget, applicants should take into account the requirements set out in Section 8, Section 10.3 and Section 11 of the Guidelines for Applicants.

The declarations signed by the applicant (Annex II.) and each partner (Annex III.) relate exclusively to participation in Stage 1: Concept note. As such, they confirm understanding and acceptance of the call conditions, eligibility, ethical compliance, and commitment to participate in Stage 2: Full application upon a positive evaluation decision.

Since detailed budgets are not required at the Concept note stage, the signature does not legally bind the applicant or partners to a specific percentage share of the budget or to any detailed allocation across cost categories.
Final budget distribution and financial responsibilities among consortium members will be formally defined and agreed upon in the Full application form and the Partnership agreement, which must be submitted before the Award decision is made. Proof of secured own funds for project co-financing (in the case of enterprises) must be provided before the Grant agreement is signed.

In the interest of equal treatment of applicants, the MSEY cannot provide prior eligibility opinions regarding individual project proposals or activities.

The E&S screening will be conducted based on the submitted Environmental and social screening questionnaire (ESSQ), which is to be provided after the project proposal has been ranked within the available allocation of the Call.

Projects assessed as having a low or moderate E&S risk are eligible for funding under this Call. As outlined in Annex I., activities that are classified as high or substantial risk following the E&S screening process are deemed ineligible.

As described in Table 12 of the Guidelines for Applicants, the applicant is required to submit a supporting document of up to 5 pages, which must include the mandatory information listed in the table. There is no predefined template for this document. The format is free, but the content must clearly address the required information to be considered valid.

In addition, the applicant is allowed to submit other relevant supporting documents, such as laboratory testing results, earlier trial outcomes, or critical function evidence, to strengthen the credibility and maturity of the proof-of-concept.

This is a mandatory requirement. As defined in Table 7 Eligibility of costs and budget cleaning in Annex I. Conditions for the preparation and implementation of projects, the share of the total eligible project budget allocated to the applicant must fall within the range of 50% to 75%.

Update (June 27, 2025): This is a mandatory requirement. As defined in Table 7 Eligibility of costs and budget cleaning in Annex I. Conditions for the preparation and implementation of projects – 1st revision, the share of the total eligible project budget allocated to the applicant must fall within the range of 40% to 75%.

Applicants are not required to distinguish costs by type of research activity (i.e. industrial research and experimental development). Instead, a base aid intensity of 25% is uniformly applied to all research activities, as the Call supports activities following proof-of-concept (PoC) validation.

Additional increases to the aid intensity may apply as follows: +10 percentage points for medium-sized enterprises; +20 percentage points for small enterprises; +15 percentage points for effective collaboration, as defined in the call documentation.

However, the total aid intensity must not exceed the maximum thresholds specified in Table 8 Intensity of grant for enterprises by category of aid, as outlined in the Guidelines for Applicants. These ceilings are:

• Croatian micro and small enterprises: up to 60%
• Croatian medium-sized enterprises: up to 50%
• Croatian large enterprises: up to 40%.

Applicants must ensure that the final proposed aid intensity complies with these maximum permissible levels.

As stated in Section 7.2 of the Guidelines for Applicants, the limits set out in Table 5 Maximum number of applications permitted to be submitted by public higher education institutions and public research institutes apply separately to each role, applicant and partner.

This means that the number of project proposals in which public higher education institutions and public research institutes may participate as applicant and as partner are not cumulative.

Applicants must ensure that the number of project proposals submitted in each role does not exceed the applicable limit.

Update (June 27, 2025): This also applies to Croatian private higher education institutions and private research institutes.

The indirect cost, calculated as a flat rate of up to 7%, applies to the total eligible costs of each applicant or partner classified as a research organization, as defined in the Guidelines for Applicants. The indirect cost, calculated as a flat rate of up to 15%, applies to the total eligible costs of each partner classified as an enterprise.

At the Full application stage, indirect costs must be presented as a separate budget line for each eligible applicant and individual partner.

As specified in Section 7.1 and Table 12 of the Guidelines for Applicants, the JOPPD form(s) must be submitted only by applicants and partners that are Croatian public higher education institutions (excluding universities with constituents without legal personality) and public research institutes.

The JOPPD form(s) is not required from other eligible applicants or partners, such as:

• University constituents without legal personality
• Other public research organizations
• Private higher education institutions and private research institutes
• Scientific institutions from other countries
• SMEs or large enterprises.

Update (June 27, 2025): As specified in Section 7.1 and Table 12 of the Guidelines for Applicants, the JOPPD form(s) must be submitted only by applicants and partners that are Croatian private higher education institutions, private research institutes, public higher education institutions (excluding universities with constituents without legal personality) and public research institutes.

The JOPPD form(s) is not required from other eligible applicants or partners, such as:

• University constituents without legal personality
• Other public research organizations
• Scientific institutions from other countries
• SMEs or large enterprises.

It is not mandatory to enclose an excerpt from the court register at the Concept note stage. However, during the Full application stage, applicants shortlisted after the evaluation of Concept notes may be required to submit additional documentation to confirm their eligibility, including but not limited to legal registration documents.

For enterprises, it is a requirement that at least one person was employed based on recorded working hours, as reflected in the latest annual financial statement. As outlined in Section 1.1. Exclusion situtations, Annex I. Conditions for the preparation and implementation of projects, enterprises without any recorded employment in the last financial year are not eligible to participate as partners in the project.

For research organizations that do not yet have a closed full financial year or did not have employees during that year, the daily rate is calculated based on the most recent month for which salaries have been paid. The calculation is performed using the following formula: Daily rate = (Total staff cost of the organization in the most recent paid month × 12 months × 1.2) / Number of work units in that month / 215 working days. As this relates to the Full application stage, shortlisted applicants will receive detailed guidance on calculating and documenting personnel costs during that stage.

As outlined in the Call documentation, project proposals must be based on a validated proof-of-concept (PoC). This means that the core functionality of the proposed innovative solution must already be tested and demonstrated prior to submission.

Applicants are encouraged to refer to commonly accepted EU references and tools, such as those available through the Horizon Europe NCP Portal, to assess whether their innovative solution meets the required level of maturity. A validated proof of concept typically demonstrates that the key technological components have been functionally verified in a laboratory or relevant environment.

Completed professional or scientific projects may serve as the basis for a validated PoC, but only if they include structured validation or testing activities with clearly defined objectives, methodologies, performance indicators, and demonstrable results that are directly relevant to the proposed solution. General project outputs, previous experience, or conceptual frameworks without formal validation and documented testing results would not be considered sufficient for satisfying the PoC requirement.

Experts from non-partner organizations may be involved in the project under specific conditions, depending on the nature of their engagement:
– Supplementary employment contract: This type of engagement is acceptable, provided that the individual is formally employed by the applicant or a project partner prior to the submission of the Concept Note or Full Application, depending on the stage at which the person is referenced. In such cases, their qualifications (CV) will be taken into account during the quality assessment of the project proposal.
– Unpaid contributor (non-staff, no cost to the project): If the expert will not receive remuneration through the project, they may still be listed as a member of the research team. Their role and contribution should be clearly defined in the proposal. Their qualifications (CV) will also be considered during the quality assessment.

Also, the individual may also be engaged as an external expert through a service contract. However, in this case, their references and qualifications will not be considered in the evaluation of the project team’s research quality. This type of engagement should be clearly described under external services in the budget.

In the interest of ensuring equal treatment of all applicants, the MSEY does not provide prior opinions regarding the eligibility of specific costs or activities. Applicants are advised to carefully consult Tables 9–11 of the Guidelines for Applicants, which list all eligible cost categories under this Call. Please note that any costs not explicitly listed as eligible in Section 10.3 of the Guidelines for Applicants and within the relevant tables are considered ineligible.

All project partners, including small and medium-sized enterprises (SMEs), are responsible for planning the costs related to the activities assigned to them within the Full application. The beneficiary of the grant (the applicant) submits the request for reimbursement of funds (request for paymenet) to the Croatian Science Foundation, based on eligible expenditures incurred by both the beneficiary and its partners. Upon verification of the request, the MSEY disburses the funds exclusively to the beneficiary, who is the official signatory of the Grant Agreement.

The financial and legal relationship between the beneficiary and each partner is governed by the Partnership Agreement, which must be concluded at the consortium level and include the minimum content requirements specified in Annex VIII of the Call, including:

• the roles and responsibilities of all parties involved in the agreement,
• financial management procedures, including record-keeping and certification of costs incurred in the project,
• the planned schedule for transferring funds from the beneficiary to the partner,
• the eligibility of expenses, their value, and the amount of grant funds allocated for the activities of the beneficiary/partner under the project, and
• other mutual rights and obligations.

In the specific example, if an SME performs analyses as part of its own project-related activities (i.e. not as an external service provider), those costs are reported through the SME’s internal project accounting. Such costs may include personnel expenses, costs of materials and small inventory, or depreciation costs of instruments and equipment, or indirect costs, and are included in the beneficiary’s request for payment. In this case, the SME does not issue an invoice to the applicant, as the expenditures are not considered external services, but internal costs incurred for its assigned project activities.

The purpose of the signed JOPPD form(s) is to determine the maximum number of project proposals in which a Croatian public higher education institution (excluding universities with constituents without legal personality) or public research institute may participate, either as an applicant or a partner, in accordance with Table 5 of the Guidelines for Applicants.

Only the official JOPPD form(s), signed and submitted in accordance with the Guidelines, will be accepted for this purpose. Alternative documents, such as certificates from the Tax Administration or internal employment records, are not considered valid substitutes.

The number of employees stated in the JOPPD form(s) refers exclusively to staff employed on the basis of employment contracts (hrv. ugovor o radu na određeno ili neodređeno radno vrijeme), regardless of whether the employment is full-time or part-time. It does not include external experts, consultants, or other individuals engaged under service contracts (e.g. hrv. ugovor o djelu, etc.).

Update (June 27, 2025): This also applies to Croatian private higher education institutions and private research institutes.

Costs related to field research necessary for the implementation of research activities foreseen by the Call (per diems, travel, and accommodation expenses) are eligible. Field research must take place within the territory of the Republic of Croatia. Each individual field research activity may last a maximum of 30 consecutive days, regardless of the number of researchers involved.

Holding an academic title is not formally required under this Call. However, in the Full application stage, the expertise of the key personnel within the research team, including the principal investigator and key researchers, will be a critical element in the quality assessment of the project proposal, particularly under the evaluation sub-criterion Resources and budget.

This is not prescribed by the Call. The applicant and partners are responsible for planning personnel costs in line with the project’s needs and the effective implementation of project activities. Therefore, a newly employed person may be engaged at less than 100% of full-time employment, provided that this arrangement is justified by the scope of work and is aligned with the project’s objectives and timeline.

The contingency reserve may be budgeted only by the applicant, and it may amount to up to 10% of the total eligible costs of the applicant and partners (excluding indirect costs and the contingency reserve itself). This reserve is intended to cover unforeseen and justified costs that may arise during project implementation. Its use is subject to prior approval by the contracting authority and can only be activated in duly documented and approved cases.

The applicant is responsible for the financial and accounting management of eligible personnel costs funded through the project. The same working hour of one staff member cannot be funded from two public sources simultaneously (e.g., project funds and the state budget), in line with the principle of avoiding double funding.

We also refer you to the Labour Act (OG 93/14, 127/17, 98/19, 151/22, 46/23, 64/23) and the collective agreement applicable to your organization. The MSEY is not responsible for interpreting this legislation or your organization’s internal procedures.

If no grant funds are planned for existing staff, it is not necessary to list these costs as ineligible, but their roles must still be described in the project proposal.

In the interest of ensuring equal treatment of all applicants, the MSEY does not provide prior opinions on the eligibility of specific costs or activities.

As outlined in the Guidelines for Applicants (Section 10.3):

• For research organizations (ROs), indirect costs may include administrative costs related to management, employment, accounting, utilities (cleaning, telephone, water or electricity) and other similar costs (calculated as a flat rate, up to 7% of all eligible costs) (applicable for each RO).
• For enterprises, indirect and other costs may include administrative costs related to management, employment, accounting, utilities (cleaning, telephone, water or electricity), and other similar costs. Additionally, eligible costs include costs of participating in events for networking with potential international and national collaborators, ROs and the business sector (conferences, trainings, expert meetings, events for finding collaborators, etc.) such as travel expenses, accommodation expenses, per diems, and registration fees. Also, eligible costs include costs related to field research necessary for the implementation of research activities foreseen by the Call (per diems, travel, and accommodation expenses). Field research must take place within the territory of the Republic of Croatia. Each individual field research activity may last a maximum of 30 consecutive days, regardless of the number of researchers involved. Cost for training of researchers, dissemination of research and development results from the project (e.g. costs of publication of scientific papers, proofreading, registration fees, related travel costs, accommodation costs and per diems, costs for organizing workshops/conferences) (calculated as a flat rate, up to 15% of all eligible costs for each enterprise).
Costs incurred under the indirect rate, no proof of service or payment is required.

In the interest of ensuring equal treatment of all applicants, the MSEY does not provide prior opinions regarding the eligibility of specific costs or activities.

As stated in Table 9 of the Guidelines for Applicants, eligible costs include: “costs of adaptation works carried out in accordance with the Ordinance on simple and other construction works and works (OG 112/17, 34/18, 36/19, 98/19, 31/20, 74/22, 155/23).”

In the interest of ensuring equal treatment of all applicants, the MSEY does not provide prior opinions regarding the eligibility of specific activities or costs.

However, it is important to highlight that the Call supports research and development activities aimed at generating mission-oriented solutions, with a strong focus on enhancing the market readiness of R&D results developed through the project. Costs directly related to the formal establishment of a company, initial capital, or infrastructure financing for a startup, when these go beyond the scope of research activities, are not considered eligible under this Call.

If the applicant or partner does not have a Statute, or if the Statute does not explicitly define the organization as a research organization, another relevant act may be submitted to demonstrate eligibility. It is the responsibility of the applicant to assess and determine which official act can best support this eligibility.

The MSEY and the CSF reserve the right to request additional documentation during the verification process to confirm the eligibility of the applicant or partner.

The cost of external research services may include the engagement of organizations or individuals to perform research and development activities that the internal project team is not able to carry out independently.

The cost of such external research services may be paid through a service contract (e.g. contract for services or work contract (hrv. ugovor o djelu)), provided that it is in accordance with the Public Procurement Act. In cases where the beneficiary or partner is not subject to the Public Procurement Act, the Rules on the Implementation of Procurement Procedures for Non-obligators of the Law on Public Procurement must be applied. Additionally, the cost of student work may be covered using the applicant’s or partner’s own funds.

The project manager (within the project team) and the principal investigator (within the research team) must remain the same in both stages of the application (Concept note and Full application). However, it is possible to add new members to the project or research team at the Full application stage, provided that such changes do not negatively affect the quality assessment results obtained in Stage 1.

Any modifications to the team during the implementation phase are allowed, as long as they do not negatively affect the quality assessment conducted at the Full application stage and are properly justified and documented in accordance with the terms of the Grant Agreement.

Each applicant or partner claiming staff costs must apply the same daily rate for every individual from their organization or enterprise involved in the project for whom such costs are claimed. When budgeting eligible staff costs, it is recommended to calculate and present the costs separately for each individual participating in the project (daily rate × number of workdays on the project = individual staff costs). This approach ensures greater traceability and clarity of the costs associated with each team member.

A partnership between an applicant and a partner (enterprise) that is an affiliated entity of the applicant or another partner (e.g. through ownership or control, or similar legal or financial ties) is acceptable under this Call, provided that all eligibility criteria and other requirements outlined in the Call documentation are met.

Generally, TTOs that meet the conditions outlined in the Call are eligible. However, whether the role of a specific TTO in a specific project proposal is well justified and whether it has the capacity to fulfil that role will be a matter of evaluation.

In the interest of ensuring equal treatment of all applicants, the MSEY does not provide prior opinions on the eligibility of specific project activities or on the roles of individual consortium members. Applicants and all partners are fully responsible for defining and distributing project activities among consortium members in accordance with the requirements of the Call. It is up to each consortium to assess and justify the suitability of its members and the distribution of responsibilities in its project proposal.

The factor 1.2 in the formula for calculating the daily rate, corresponding to a 20% increase in personnel costs, is a budgeting reference. It is intended to provide flexibility for estimating staff costs over the duration of the project. This approach acknowledges potential increases in salaries compared to the baseline documented costs of staff.

Each project and research team member within the same research organization or enterprise must be assigned the same daily rate. Reimbursement of staff costs will be based on the number of days each individual is engaged in the project, as documented through monthly timesheets, multiplied by the daily rate value specified in the project budget.

The implementation of the project will not involve an assessment of the beneficiary’s or partner’s internal employment arrangements, including the terms under which new personnel are recruited or existing staff are engaged. We refer you to the Labour Act (OG 93/14, 127/17, 98/19, 151/22, 46/23, 64/23) and any collective agreements applicable to your organization. The MSEY is not responsible for interpreting this legislation or your internal procedures.